MIT Investment Management Co. recorded losses in the fiscal year that ended on June 30, returning negative 2.9% for the period, representing a decline in assets to $32.28 billion, the fund reported in its annual MIT treasurer’s report.
The loss marks the second consecutive year in which MITIMCo had negative returns, following a negative 5.3% return in fiscal 2022. An increase in costs due to inflation also put pressure on the university.
“The Institute faced a complex and difficult economic environment in fiscal 2023,” the treasurer’s report stated. “In addition to experiencing investment losses, it encountered significant inflationary pressure on a range of costs.”
Endowment assets declined 4.7% as of the end of fiscal 2023 as a result of a net loss on investments and the distribution of gains to support university operations.
While the endowment had negative returns, MIT still reported a strong year for fundraising, taking in contributions of $553.3 million, a decline from 2022’s record-breaking total of $686.7 million, according to the report.
MIT also reported declines in asset values in its defined benefit pension plans. Plan assets declined $252 million to $5.2 billion. MIT officials attributed the declines to payments made to beneficiaries, as well as negative investment returns. Despite the negative return, the university’s defined benefit pension plan had a funding level of 113.9% as of June 30, up from 107.5% one year earlier.
MITIMCo is the investment management arm of MIT and manages the university’s endowment fund and retirement system.
According to the university’s most recent 15-year letter, released in March 2022, the endowment returned 18.9% over 5 years, 14.5% over 10 years and 11.7% over 15 years, as of June 30, 2021, outperforming the global 70/30 passive benchmark returns of 11.2%, 8.2%, and 6.9%, respectively.